Massachusetts Raises Minimum Wage, Creates New Paid Leave Program

June 29, 2018

Massachusetts Governor Charlie Baker has signed into law an act that will mandate an annual August sales tax holiday, increase minimum wage over the next five years and create a new paid family and medical leave program in Massachusetts.

The act – H4640 – has also been referred to as the “Grand Bargain,” as it was created to keep a series of questions off the November ballot, including a proposal to cut the state sales tax from the current 6.25 percent to 5 percent, The Associated Press reported.

“I am thankful that all parties came together, compromised and found common ground to produce a better set of policies than what the ballot questions represented,” said Governor Charlie Baker in a statement regarding the legislation. “The Massachusetts workforce continues to grow with more and more people finding jobs and our administration is committed to maintaining the Commonwealth’s competitive economic environment.”

Massachusetts Gov. Charlie Baker

The legislation will create a permanent two-day weekend sales tax holiday, a provision recently proposed as part of the Baker-Polito Administration’s Economic Development Bill to provide annual relief for consumers and increased sales for retailers, according to a press release issued by Baker’s office. The new law will begin in August of 2019 and the particular weekend will be determined by the Legislature.

The act also gradually raises the Commonwealth’s minimum wage to $15 per hour over five years, with an initial increase taking effect in January 2019. Coupled with that increase will be a raise to the minimum base wage rate for tipped workers, up to $6.75, that will also phase in over a five-year period beginning in January of 2019. Wage policies for Sunday and holiday pay will also be reformed and brought in line with most other states across the country, the press release said.

The third major component of the legislation introduces a new Paid Family and Medical Leave program for Massachusetts employers and employees. The program will provide employees who contribute to the program with the ability to take paid leave for up to 12 weeks per year to care for a family member or bond with a new child, 20 weeks per year to deal with a personal medical issue, and up to 26 weeks to deal with an emergency related to deployment of a family member for military service.

Weekly benefit amounts will be calculated as a percentage of the employee’s average weekly wage, with a maximum weekly benefit of $850. Self-employed individuals may opt into the program as well. For the law to apply to municipal employees, the city or town involved must vote to accept participation in the program, the press release stated.

In a statement issued by Baker’s office, Lt. Governor Karyn Polito said, “Compromise on all sides made this legislation possible, and our administration remains committed to making the Commonwealth the best place to live, work and raise a family.”

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